August 2026 Portfolio Update
Portfolio changes and thesis updates covering July
Hey. Happy to report that we have crossed 25,000 subscribers on Substack. Thank you for supporting us over the past 1 year.
July was an interesting month, with a sharp pullback in the Semis/AI trade and the poster child of the AI trade, Situational Awareness, getting margin called and its public portfolio suffering heavy losses (and being sold to a hedge fund) due to high leverage. We had derisked our portfolio for such a pullback over the last month. We trimmed our holdings in semiconductor stocks as prices rose over the last 2 months.
We think the AI trade is still strong. We previously wrote about playing the AI trend through cloud service providers. The market is coming around to this thesis as well, demonstrated by the strong post-earnings reaction to Amazon and Microsoft earnings.
Rebound Portfolio Performance
The Rebound portfolio is now beating the market (S&P 500) by ~5.8% since inception in Aug’2025. Below is our portfolio snapshot from RC’s Schwab account.
On a year-to-date basis, the Rebound portfolio is beating the market (S&P 500) by ~3.2%. We are quite satisfied with our returns in 2026, given how polarized the markets have been - with only AI/Semi names doing well. This is a strong performance given our preference for value picks. In July, the key drivers for the RC portfolio’s performance were the strong earnings from Amazon and Microsoft. Names like Constellation Software and Mercado Libre were also major drivers of the outperformance. Year to date, Semis were a large driver of the performance.
Portfolio Holdings Update
My target for the RC portfolio is to achieve a ~15% CAGR over the long term. At that rate, the portfolio doubles roughly every 5 years. This is a reasonable goal to reach without taking on significant risk.
I am focused on compounding my wealth and treat the S&P 500’s return as a benchmark to beat, but I don’t expect my strategy will beat it in all conditions. Especially as the market is driven by momentum and trends in many quarters.